Consumer confidence falls sharply as Americans worry about the economy

Core Insights - Consumer confidence fell significantly in November, reaching a level of 88.7, down from an upwardly revised 95.5 in October, and below the expected 93.4 [1][12] - The decline in consumer confidence is attributed to concerns over prices, inflation, tariffs, trade, and political issues, including the federal government shutdown [2][12] Consumer Sentiment - Nearly 25% of American households are living paycheck to paycheck, indicating financial strain among consumers [3] - Consumer confidence decreased across nearly all income levels, with only those earning less than $15,000 showing an improvement, although they remain the least optimistic group [5] - The overall tone of consumer write-in responses was more negative in November compared to October, with mentions of the labor market easing slightly but still prominent [5] Demographic Insights - Confidence declined among political groups, with independent voters experiencing the sharpest drop [6] - Younger consumers under 35 showed improved confidence, while those aged 55 and older remained the most pessimistic [6] Economic Expectations - Consumers' inflation expectations for the next year rose to a median of 4.8%, with the Expectations Index remaining below 80 for ten consecutive months, indicating potential recession signals [8] - All components of the Expectations Index worsened in November, particularly pessimism regarding business conditions six months ahead [11] Implications for Monetary Policy - The significant drop in consumer confidence may pressure the Federal Reserve to consider interest rate cuts in December and beyond, as indicated by economic analysts [13]